Caterpillar plans locomotive factory in Indiana

Caterpillar Inc. announced plans Friday to start building diesel-electric locomotives in a vacant former transformer factory in eastern Indiana, potentially hiring 650 workers in the next two years.

Company executives said the Muncie factory would allow Caterpillar subsidiary Progress Rail Services to seek business related to transit rail projects.

The Peoria, Ill.-based company plans to spend $50 million to reopen the 740,000 square-foot plant on Muncie's south side that ABB Power T&D Co. closed in 1998. Caterpillar also plans to build a locomotive test track on the facility's 75-acre campus.

Billy Ainsworth, the president and chief executive officer of Progress Rail, told the crowd during an announcement event at the factory that production is expected to start during the second half of next year and increase during 2012.

"If the economy picks up and demand picks up, we'll go to full production," Ainsworth told WTHR-TV of Indianapolis.

The company expects to announce within a few weeks plans for hiring employees ranging from engineers to production workers, Ainsworth said.

The Star Press reports Progress Rail will be taking over a massive building that features a central structure with a 99-foot-high ceiling and a manufacturing floor with built-in railroad tracks. It has mostly been used for storage in recent years.

The Indiana Economic Development Corp. said it offered Progress Rail up to $3.5 million in performance-based tax credits and up to $1 million in training grants, along with up to $1 million to the city for infrastructure improvements.

State and local officials welcomed the announcement in a county that had a 10.1 percent unemployment rate for September and has lost thousands of manufacturing jobs in recent years.